Patients suffering from ocular injury and inflammation are at risk for development of chronic uncontrolled immune activation and tissue injury. Many of these conditions are commonly treated with non-specific anti- inflammatory drugs such as corticosteroids, which non-discriminately suppress host immunity, including both pathogenic and regulatory cells of the immune system. There is thus a pressing need for developing more effective and safe immunomodulatory strategies which not only downregulate specific pathogenic immune cells, but importantly also promote regulatory immune cells, namely myeloid-derived suppressor cells (MDSC) and regulatory T cells (Tregs). Interestingly, non-hematopoietic bone marrow-derived mesenchymal stem cells (BM-MSC) have shown significant immunomodulatory promise. Our preliminary studies demonstrate that BM- MSC can indeed promote MDSC and Treg function, and can be used to reestablish immune quiescence in ocular inflammation. However, very little is known regarding the mechanisms by which BM-MSC promote the function of these immunoregulatory cells. We specifically hypothesize that BM-MSC (i) skew differentiation of immature myeloid progenitor cells toward MDSC and away from macrophages; and (ii) provide direct support for Treg function via both cell-to-cell contact and paracrine mechanisms. To validate these hypotheses, we propose to pursue two specific aims: In Aim 1, we will define the mechanisms by which BM-MSC promote generation of myeloid-derived suppressor cells and control ocular inflammation. We will specifically investigate i) which functional subset of MDSC is promoted by BM-MSC; and ii) determine BM-MSC-expressed factors that promote MDSC generation. In Aim 2 we plan to determine the mechanisms by which BM-MSC directly enhance regulatory T cell function. In particular, we will investigate i) how BM-MSC-secreted hepatocyte growth factor promotes Treg function; and ii) the BMMSC cell surface-expressed molecules that promote Treg function through cell-cell interactions. The methodology we propose has been designed to utilize our laboratory's expertise in immunological assays along with a well-characterized murine cornea model of transplant-induced ocular inflammation and immunity. We anticipate that delineation of the mechanisms by which BM-MSC control ocular inflammation will identify critical immunomodulatory factors which can be utilized to develop new therapeutic strategies. The overall impact of this research will be significant, given the high prevalence of ocular inflammatory disorders and the potential benefit of therapeutic strategies that promote immunoregulatory cells while also inhibiting pathogenic immune cells.